Required 2:

Problem 13-10 Prepare a Statement of Cash Flows; Free Cash Flow [LO13-1, L013-2, L013-3] Joyner Company's income statement for Year 2 follows: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: 707,000 314,000 393,000 216,000 177,000 Gain on sale of equipment Income before taxes Income taxes Net income 9,000 186,000 55,800 $130,200 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Year 1 Year 2 Assets Cash and cash equivalents Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment $68,000 68,400 111,000 283,000 17,000 479,400 507,000 130,100 376,900 267,000 319,000 8,500 662,500 638,000 165,700 472,300 43,000 Less accumulated depreciation Net property, plant, and equipment Loan to Hymans Company Total assets $1,177,800 $856,300 Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Common stock Retained earningS Total stockholders' equity Total liabilities and stockholders' equity $ 320,000 $250,000 60,000 81,300 447,800 391,300 101,000 492,300 272,000 92,000 364,000 $1,177,800 $856,300 42,000 85,800 204,000 651,800 337,000 189,000 526,000 Equipment that had cost $31,600 and on which there was accumulated depreciation of $11,300 was sold during Year 2 for $29,300. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock. Required: 1. Using the indirect method, compute the net cash provided by/used in operating activities for Year 2 2. Prepare a statement of cash flows for Year 2 3. Compute the free cash flow for Year 2. Required 1Required 2 Required 3 Using the indirect method, compute the net cash provided by/used in operating activities for Year 2. (List any deduction in cash outflows as negative amounts.) Joyner Company Statement of Cash Flows-Indirect Method (partial) Prepare a statement of cash flows for Year 2. (List any deduction in cash and cash outflows as negative amounts.) Joyner Company Statement of Cash Flows For Year 2 Operating activities: Investing activities: Financing activities: Beginning cash and cash equivalents Ending cash and cash equivalents Required 1 Required 2Required 3 Required 3 Compute the free cash flow for Year 2. (Negative amount should be indicated by a minus sign.) Free cash flow